Opportunities for entrepreneurs and small-scale businesses in Africa’s lucrative and expanding mobile phone market…

Opportunities for entrepreneurs and small-scale
businesses in Africa’s lucrative and expanding
mobile phone market…
The beautiful thing about the mobile phone market is the
abundance of space and opportunities it provides for both big and
small businesses. While businesses that maintain telecom facilities
and install communication masts/towers may require a lot of
startup capital, there are quite a number of small-scale businesses
for entrepreneurs who are considering this market. Some of them
are:
Sale of new and used mobile phones (including repairs) - Most
people (especially in developed countries and among Africa’s rich
and middle class) change their mobiles phones for newer models
every other year. Mobile phones have become the fastest selling
devices everywhere in the world!
However, most Africans who would like to own new mobiles
(especially smartphones) are usually disappointed because these
devices are often too expensive to afford. As a result, the trade in
used mobile devices has become a multi-million dollar market in
Africa. For less than half the price of brand new phones, millions of
Africans can afford high-end and multifunctional devices like smart
phones. Many of these devices are imported from Europe and USA
and sold in several informal open markets across Africa. Because
of this booming second-hand market, more people are able to
quickly sell off their phones and then buy a brand new one.
Entrepreneurs who can get a reliable supply of used mobile phones
have a niche market to exploit in Africa. Since almost all the big
mobile makers (Nokia, Samsung, Blackberry, Apple etc) now have
storefronts in many African cities, it may be difficult to compete
against them in the sale of ‘brand new’ mobiles. However, there is
a growing and thriving market for used phones on the continent.
The appeal of used phones here is the opportunity to own a new
model at a very affordable and inexpensive price.
Mobile phone accessories - As more Africans own mobile phones,
the demand for accessories like chargers, earphones (wireless and
wired), batteries, phone pouches, USB connectors and memory
cards will remain on the rise. Millions of these accessories (worth
billions of dollars) are imported from China every year. Nigeria’s
Alaba International Market has become a key hub and supplier to
countries in the West Africa region.
Innovations such as solar-powered devices for charging mobile
phones are bound to be taken very well by the market because of
Africa’s notorious electric power problems. Entrepreneurs must
learn to watch and follow the mobile phone trends very closely in
order to exploit new opportunities for accesssories in the local
market. (photo credit: ahdistribution.com)
Pre-paid recharge cards and vocuhers - More than 80 percent of
Africa’s mobile subscribers are pre-paid customers. Every now
and then, there comes the need to top up and recharge call credit.
As part of a strategy to reach the remotest parts of Africa, the big
mobile players like MTN, Vodafone, Econet & GLO now have a
network of registered dealers who print and sell different
denominations of call credit directly to the mass market. This has
created a lot of opportunities for small businesses and
entrepreneurs who have become wholesalers and retailers. Signing
up for these services is usually easy and most of these providers
allow interested dealers to register through their website. (photo
credit: showlove.co.za)
By the way, there’s a trend that’s more than likely to overtake the
booming market in printed recharge cards. Mobile money payment
solutions, which are fast gaining popularity on the continent, allow
mobile phone users to buy call credit with their phones, thereby
removing the need to buy physical recharge/credit vouchers.
However, the common poor network coverage problems in many
parts of Africa remains a major challenge and customers are likely
to continue buying these paper cards.
Mobile Money services – Mobile Money Operators (MMOs) act like
small bank branches where people can send or receive money
through their mobile devices. Since more people own mobile
phones than bank accounts in Africa, there is a growing push by
big businesses and governments all over the continent to use
mobile phones as tools for business transactions.
The plan appears to be working. MPesa , the popular mobile money
service in Kenya, processes more transactions than all the banks
in the East African country combined. More African countries have
jumped on the Mobile Money train in a bid to replicate MPesa’s
success. However, there appears to be a shortage of operators to
drive the wide distribution network needed for Mobile Money to
succeed.
In Nigeria for example, only about 3,000 businesses have
registered to become Mobile Money Operators (MMOs) since the
service was introduced in 2011. However, Nigeria’s huge market
needs up to 250,000 MMOs to achieve MPesa’s success in Kenya.
Mobile Money is positioned to become big business in the near
future.
Payphone Services - Yes, nearly one in every three Africans now
owns a mobile phone but how many of us can afford call credit on
our phones at all times? The opportunities for public payphone
businesses may never go out of fashion. There are times and
situations when people who own a phone are unable to make any
calls. It could be due to a dead battery, poor network coverage, a
stolen phone or just a lack of money to recharge phone credit.
(photo credit: kiwanja.net)
A large portion of Africans are still unable to afford call credit at all
times and still need to use a public payphone. Although it can be
quite inconvenient, many Africans find this service to be more
flexible and cheaper than buying call credit (especially if they don’t
make calls very often).
Installation, Service and repairs of telecom
infrastructure - With millions of people to serve
and lots of ground to cover, telecom companies are
rolling out communications masts/towers and base
stations across Africa. With parts and equipment
imported from abroad (commonly China), small-
scale construction companies are helping to erect
these structures.
In addition to installation, these companies also
enjoy contracts that cover routine servicing,
maintenance and repair. Most of these telecom
base stations are not connected to the electric
power grid and, as a result, service companies
often supply the fuel used to run diesel-powered
generators around the clock. (photo